Supreme Court to Hear Sports Gambling Case Monday

WASHINGTON (CN) – On Monday the Supreme Court will hear a challenge to a federal gambling law that could have sweeping implications not just for sports betting but for the intersection of federal and state laws.

Christie v. NCAA is on its face a case about sports gambling. Congress passed the Professional and Amateur Sports Protection Act (PASPA) in 1992, prohibiting most states from enacting laws that legalize betting on sports. The law grandfathered in Nevada, Montana, Delaware and Oregon, all of which had already set up sports lotteries before PASPA passed.

The rest of the country had a one-year grace period in which they could pass legislation that would allow gambling on sports.

PASPA remained undisturbed for a decade.

Then, in November 2011, New Jersey voters passed an amendment to the state constitution allowing state lawmakers to enact legislation making gambling on sports legal. The Sports Wagering Act was signed into law in January 2012, allowing casinos and racetracks to take bets on college and professional sporting events.

The four major sports leagues in the country – the NFL, MLB, NBA and NHL – joined the NCAA in challenging New Jersey’s new law in federal court.

Marc Edelman, a law professor at Baruch College, Zicklin School of Business at the City University of New York, said in an interview that sports leagues have been worried about widespread sports gambling since the Black Sox scandal, in which eight players for the Chicago White Sox were accused of throwing games in the 1919 World Series as part of a gambling ring.

Defending against the suit, New Jersey argued PASPA violates the commandeering doctrine from the 10th Amendment, which holds powers not expressly given to the federal government are reserved by the states. The Supreme Court has taken that to mean the federal government cannot “commandeer” state governments to do its bidding by requiring them to pass certain laws.

“The federal government cannot force a state legislature to pass certain legislation, nor can the federal government force a state executive branch to implement its own federal laws,” Caroline Mala Corbin, a professor at the University of Miami School of Law, said in an interview.

Outside of state sovereignty issues, commandeering interferes with legislative accountability – voters might end up punishing state legislators at the ballot box for a law Congress made them pass, Corbin explained.

“The government is held accountable by the voters because they vote people out of office when they pass laws they don’t like,” Corbin said. “But if the federal government is ordering the government to pass a regime, it will not be clear to voters who they should be holding accountable for that regime.”

In the first round of litigation, federal court in the District of New Jersey disagreed with the state’s commandeering argument. On appeal, the Third Circuit upheld the decision, saying PASPA did not require New Jersey to pass a law or take a specific action, but rather prohibited the state from handing out gambling licenses.

So New Jersey’s legislature went back to work, looking for a way to pass a law that would put into action the voters’ referendum while still obeying the federal appeals court’s decision.

In 2014, the legislature decided that instead of passing a law allowing for the licensing of casinos and racetracks, it would repeal the laws requiring casinos and racetracks to be licensed to accept sports bets.

“Sports wagering by adults at those locations would be as legal as buying a cup of coffee at Starbucks,” the state’s brief before the Supreme Court states. “New Jersey would regard it as a private transaction subject only to generally applicable state and federal laws.”

That set off the current round of litigation. The leagues again sued and the federal district court and the Third Circuit enjoined New Jersey’s law, saying it, too, violated PASPA. New Jersey appealed to the Supreme Court, where it argues that by prohibiting states from repealing laws already on their books, PASPA commandeers state governments.

The Supreme Court also agreed to hear a case challenging PASPA filed by a horseracing group – New Jersey Thoroughbred Horsemen’s Association, Inc. v. NCAA – consolidating it with New Jersey’s appeal.

“When Congress dictates the content of state law, it undermines the responsiveness of state governments to their electorates, blurs the lines of accountability between the citizens and their state and federal governments, and disrupts the balance between those governments that protect individual liberty,” New Jersey’s Supreme Court brief states.

The sports leagues argue that New Jersey is free to repeal its regulations on sports gambling, but that it would have to do away with them completely, not rely on the “clever” partial repeal it used to effectively authorize sports gambling at casinos and racetracks.

The leagues, joined by the United States in a friend of the court brief, further argue PASPA does not commandeer state governments because it does not actually require the states to do anything.

“The difference between permissible preemption and impermissible comandeering is that the former precludes certain state action, while the latter commands it,” the leagues’ brief states. “PASPA falls comfortably in the former, permissible camp.”

Corbin said that if New Jersey’s reading of the commandeering clause wins out, states could have an easy time getting around certain types of federal laws.

“If you argue that this is commandeering, the state is always going to be able to manipulate how it goes about things in a way that results in commandeering,” Corbin said.

Perhaps the most important case directly impacting New Jersey’s challenge is New York v. United States, a 1992 decision in which the Supreme Court found unconstitutional a provision of a federal law that required states to “take title” of radioactive waste within their borders. The sports leagues say PASPA does not run against the decision in New York because, unlike that law, it does not include an affirmative requirement of the state.

New Jersey, on the other hand, argues PASPA represents an “even more egregious” intrusion on states’ rights than did the law at issue in New York.

“Under the lower courts’ injunction, New Jersey’s executive is made to look not only unresponsive, but, indeed, hostile to the citizens’ wishes, as he must quixotically hold in place the prohibitions in spite of the legislature’s repeal of those measures,” New Jersey’s brief states.

Edelman said while New York, and the related case Printz v. United States, are the closest precedents on the commandeering issue, neither is perfect because of differences in the language of the underlying statutes.

“They might be the best parallel cases to assess whether or not this meets the requirements of commandeering but it’s not a perfect analogue,” Edelman said.

If New Jersey were to win the case, Edelman said many other states would likely follow its lead and legalize sports gambling. Eighteen states have joined briefs supporting New Jersey before the Supreme Court, and Edelman said it would be unlikely other states would pass up the opportunity for new revenue if given the chance.

But the case could extend beyond sports gambling because the record is relatively thin on anti-commandeering precedent, Edelman said.

“The precedential value of this case will really determine upon the grounds on which the case is decided,” Edelman said. “If the case is decided on anti-commandeering grounds, the case may have great precedential value moving forward, given that to date the Supreme Court has only invalidated two federal laws based on anti-commandeering provisions.”

The case would have less impact if the decision rested on the fact that the grandfather provisions in PASPA run afoul of state sovereignty because PASPA is a relatively unique law, Edelman said.